On 1 January 2022, the European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, became a direct supervisor of the largest data reporting service providers (DRSPs) in the EU. The new role gives ESMA direct powers to authorise and supervise digital service providers, except for the entities which due to their limited impact on the market will continue to be supervised by the authorities in their Member State.

ESMA’s task is to increase the transparency of financial markets. With its new mandate, ESMA will strengthen its powers in the area of supervision of data reporting service providers and will work, in close cooperation with national competent authorities (NCAs), to further enhance the quality of market data across the Union.

Supervisory responsibility for DRSPs was transferred from NCAs to ESMA due to, among others, the cross-border dimension of data processing, the aim of achieving economies of scale, and facilitating data quality convergence for all market participants.

ESMA seeks to ensure the effective and consistent application of data-driven, risk-based and outcome-focused supervisory framework for the data reporting service providers under its supervision.

To improve its new function, ESMA has developed an IT system based on Big Data technologies that is to facilitate processing, storage and supervisory analysis of large volumes of MiFIR transaction data.